New developer entering Kenya

Smaller Chinese construction companies are jostling for market share with big Chinese multinationals in the Kenyan market.

Multinationals like AVIC International and China Wuyi, which have established themselves not only in Kenya, but also in the African continent, are now facing a daunting task as other smaller and newer real estate companies enter the African market.

Dexiang Property Co Ltd, a Chinese company based in Sichuan province is one of the latest entrants in the property market in Kenya. The company is now developing three apartment blocks with seven floors each in Nairobi's Kilimani area.

The development is the first locally for the company and is strategically situated a few meters from the Chinese-owned Eastland Hotel, and near the Yaya Center and Nakumatt Prestige. The Eastland Hotel is the biggest Chinese-owned hotel in East and Central Africa. Yaya Center and Nakumatt Prestige are major shopping malls in Kenya.

Chen Xuqing, the manager of Dexiang Property, says the company conducted market studies in East Africa and found Nairobi to be the best place to do business, with good returns on investment in the real estate market.

He cites the high demand for housing from the expanding middle class and the current political stability in the country as among the reasons his company decided to choose Kenya as their preferred investment location.

Kenya was on the brink of civil war in late 2007 and 2008 after a bitterly disputed general election. The country has, however, moved on and is now experiencing one of the most politically stable moments in its history.

"Kenya is a very beautiful country and a good friend of China. I like the peacefulness and political stability in this country, and that's why we chose to come and invest here in Nairobi," he says.

Dexiang Property Co Ltd currently employs at least 50 casual or day laborers at its construction sites and Chen says on busy days they employ up to 120 people.

Other than jobs for locals, the company is also giving business to local companies that supply cement, steel and sand.

One of the main challenges in the property market in Kenya, according to Chen, is official approvals taking too long. He also says there are swindlers in the industry out to fleece foreign investors.

"We almost made a mistake and bought land that had a caveat emptor (sold as is) on its sale. After that experience we are being very careful on any deal that we enter into. Our current project is expected to be complete in October," he says.

(China Daily Africa Weekly 04/08/2016 page16)